Clashes over occupational pension project

Insurers and occupational pension funds management companies (to be set up in 2004) will clash over the management of hundreds of millions of dollars, as shown by the draft law on occupational pensions. The draft sets a contribution of 1%-5% of the monthly gross salary, to be paid by the employee along with the employer, for all those that will voluntarily choose an occupational pension scheme. If at least half of the total employees in the economy (4.3 million at the moment) contribute, the annual contributions to those funds will amount to $50-$250 million (that is 1%-5% of the $200, the gross monthly salary X 2.15 million employees X12 months). The point is that even though the draft law is almost completed, the employers’ associations and the unions, the most significant partners, have failed to agree on a great deal of stipulations. Furthermore, some of the employers’ representatives challenge the very use of this law itself. The stake of this business is huge, though not in terms of money, but because it is a test for shifting to the privately managed universal pension funds.
“We’re trying to send the draft to Parliament by mid May so that it could be voted by the end of the year and be operational early next year,” Labour and Social Security minister Marian Sarbu on Tuesday told the “Occupational pensions – continuation of the pension system reform in Romania” conference.
The occupational pension schemes will be an optional pension system to complete the public one. They are called “occupational” because they are tightly related to the activity of the pensioners to be, while joining such a fund is stipulated by the collective employment contract. This is precisely where questions arise.
“Such a provision has no place being in the collective employment contract. The reasons for this regulation, that is improving the social situation of the retired people, are good, but I can’t see why we should take so much trouble as to create a separate institution and new complicated regulations. Those that got the money and want a higher pension may go directly to insurance companies,” said Silviu Opris, executive chairman of the Romanian Industry Patronage Confederation – Compirom.